Indonesia Relies on Fiscal Buffer to Withstand Global Energy Price Impact

RRI.CO.ID, Jakarta — Indonesia leans on its fiscal strength to cushion the impact of rising global energy prices. Officials of the government said in their statement that the country has sufficient financial reserves to maintain subsidies and economic stability.

They confirmed it will keep subsidized fuel prices unchanged through the end of the year, despite volatility in global oil markets driven by geopolitical tensions.

“We can maintain these fuel prices until December by 2026,” Coordinating Minister of Economic Affairs, Airlangga Hartarto, said in Jakarta , Monday, April 6, 2026. He further conveyed that the policy is designed to protect household purchasing power and prevent inflationary spillovers.

He stated an estimation from the Ministry of Finance that as long as average global oil prices remain below $97 per barrel, the current subsidy framework remains sustainable. Even in a more adverse scenario, the government signaled it has a sizable fiscal buffer.

“We still have a cash reserve of 420 trillion rupiah (around USD 24,6 billion), which is currently in the form of a budget surplus,” Finance Minister Purbaya Yudhi Sadewa said on the same occasion. “The public should not worry [...] our fiscal capacity is sufficient,” he stated.

Indonesia is maintaining its budget deficit at around 2.9% of GDP, reflecting what officials describe as prudent fiscal management despite increased spending to support energy subsidies and economic growth.

The policy highlights Indonesia’s strategy of using state finances to absorb external shocks. Previously, some countries passed higher energy costs.